Willis Towers Watson to sell some assets to ease merger concerns

Source: Middle East Insurance Review | Jun 2021

Aon and Willis Towers Watson (WTW) have signed a definitive agreement to sell Willis Re and a set of WTW business units to Arthur J. Gallagher & Co (Gallagher). These businesses will be divested for a total consideration of $3.57bn.

The agreement resolves questions raised by the European Commission and is intended to address queries raised by regulators in some other jurisdictions. Aon and WTW continue to work toward obtaining additional regulatory approval in all relevant jurisdictions, including the US, where regulators are conducting an independent review of the Aon and WTW combination.

Benefits that the pending combination with WTW is expected to deliver include revenue growth, margin expansion, increased cash flow and earnings growth and a strong balance sheet. It is also expected to achieve $800m of cost synergies, taking into account this divestiture and other potential remedies.

Gallagher, which generated more than $6bn in 2020 revenue, agreed to purchase a group of businesses from WTW that includes:

Willis Re operations globally, excluding operations in mainland China and Hong Kong;
Global cedent facultative reinsurance, excluding operations in mainland China and Hong Kong;
Corporate risk and broking business unit known as Inspace globally and certain business undertaken for aerospace manufacturing clients;
Corporate risk and broking services in certain countries in Europe (France, Germany, the Netherlands and Spain), excluding Affinity; Bermuda; cyber in the UK and certain accounts in the Houston and San Francisco offices in the US;
Corporate risk and broking services for property and casualty as well as finex insurance in the European Economic Area, UK, US, Brazil and Hong Kong relating to certain large multinational companies headquartered in France, Germany, the Netherlands and Spain;
Corporate risk and broking finex accounts relating to certain large multinational companies headquartered in the UK; and
Health and benefits business units in France, Spain and Germany.

The transaction with Gallagher is contingent on the completion of the pending Aon and WTW combination, as well as other customary closing conditions. M

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